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The latest threat from Amazon is not online

Excerpt: Where I visit the recently opened Amazon Books bookstore in Chicago and clearly witness that the latest Amazon threat is not online. This physical Amazon store offers a great customer shopping experience.

The current victims of the retail fallout squarely blame their lackluster performance on the ascent of online shopping. Think Macy’s, Sears, Kmart, Sports Authority, Radio Shack, Payless Shoes, Rue21 et al, GameStop, HHgregg, Gander Mountain, to name a few in a building list of retail closure casualties.

We are all shopping more online, particularly when it comes to household commodity items and other stuff that can be bought sight unseen. Today, we can order anything online, receive it within 48 hours (or sometimes, that same day), save ourselves the trek to the store, the parking headaches and, if the order is not quite right, we can return the purchase easily with a prepaid label… Why would we then even consider going to an actual store? You’ll just end up with impulse purchase items that weren’t on the shopping list. 😉

This is true and not true. While ecommerce sales are growing rapidly every year, they still account for less than 10% of all retail sales. Most of us still love to shop or need to shop “in person”. The visual discovery and tactile delights offered by skilled retailers can become a sought-after experience. Problem is that many of today’s shopping experiences are a letdown.

I’ve mentioned Macy’s before. The store was once the venerated Marshall Fields flagship in Chicago. It’s now reduced to a shadow of its former glory. I need to mention Macy’s again, this time as the nominated poster-store example of how shopping in an actual store becomes more hassle than pleasure.

Case in point, I was wandering the store during my last visit, scoping out the merchandise and the general atmosphere when I ended up in the furniture department. This is a department where, one would guess, sales assistance is imperative. Right? The furniture shopper will invariably have many questions that need to be answered in feet, inches and color options. On the day I was at the State Street store, there was not a single sales associate in sight. On the whole floor. Why would anyone want to “shop” there when there are so many other competitive, interesting and convenient choices? Online being one of those obvious alternatives.

Blame the rise of online shopping. But, really, Amazon.

Traditional brick and mortar retailers blame online shopping and Amazon for their predicament. But we all know that’s only part of the story. For retailers like Macy’s or Sears, the decline is self-inflicted. Beyond that, it’s that customer behaviors and expectations have vastly changed. We are presented with unprecedented choices about where to make our purchases. Why should we settle for a less than stellar shopping experience?

The irony is not lost on us when we observe how Amazon, the same retailer that brought down so many bookstores through its online retail strategies, is now opening physical stores in the same neighborhoods where it decimated competitors not so long ago.

Amazon basically taught us how to shop online with their review, ratings and recommendations. We can also hold them responsible for our behavioral consumer shift: they pioneered online shopping and now, by all appearance, they are doing the same for brick & mortar shopping.

The shopping experience at Amazon Books, the physical store

I walked into Amazon Books in Chicago’s Lakeview neighborhood last month. This was the company’s fifth physical store. At 6,000 square feet with only 3,800 titles on display, it’s definitely not a bookstore on the scale of the mega Barnes & Noble or Borders bookstores of lore. It’s “small” but the whole product selection is curated – with guidance from Amazon’s top ratings and product popularity – to feature only top selling favorite products. Add Amazon’s tweaks and “secret sauce” to the traditional bookstore model and it made for a very enjoyable shopping experience.

This AmazonBooks in Lakeview, Chicago occupies 6000 square feet and features 3800 book titles, a kids book section, an electronics section and a coffee shop.

Summer reading? All books are displayed face up and feature a ratings card. As the sign reads: “New Hardcover Fiction. Selected using customer ratings, pre-orders, sales and popularity on Goodreads – plus books we love“. That last part means that the selection went through another round of vetting by Amazon curators.

Reviews and ratings

Every book is accompanied by a card that mentions the book’s rating on Amazon, a customer review and a barcode to scan for more information.

Each book presented here has been deemed worthy of taking up shelf space. That’s because any book in the store has a rating of at least 4 out of 5. There is also a chosen reader’s review is featured on the review card that is displayed with each book. As is a barcode that customers can scan to get more information. As a consumer, I’m comforted to know that every book in the store has been vetted by hundreds – thousands? – of readers and should provide a satisfying, if not captivating read.

Visual cues

The “If you like – you’ll love” feature is a great way to easily find books in the same category as others you might have enjoyed.

I particularly enjoyed the “If you like {_____}, you’ll love {_____}” feature. A visual, immediately accessible way to find other books in a similar theme, style or category.

Reading prompts and local interest

Inviting endcaps offer compelling and intellectually aspirational reasons to pick up a book: “100 books to read in a lifetime”. OK. Challenge accepted.

The endcaps each feature different compelling reading “themes” such as the geo-relevant “Fiction Top Sellers in Chicago”, the take-it-on “100 Books to Read in a Lifetime”, addictive “Page Turners” and “Highly Rated” books in various categories. The books throughout the store are all placed face up. This take up a lot of real estate but it does make the selection easily scannable and shoppable.

Mobile enabled and encouraged

Those blue dots show the Amazon app at work, gaining clues from the image cover and the text to figure out which book is being scanned.

Amazon knows exactly how consumers shop today: always with a phone in hand, ready to “showroom” and search for reviews, coupons, opinions… It’s probably pointless to “showroom” in the Amazon store since, as we know, Amazon is the usual showrooming reference when we shop elsewhere.

The Amazon Books store encourages customers to use their app, not for showrooming, but to see the item’s price, additional recommendations and information on the Amazon.com site itself. The Amazon app (incidentally categorized under “Essentials” in iTunes) is quite fun to use in the store. Click on the app’s camera icon and it will scan pretty much any object (you can use it anywhere! Try it on any object where you are now) and provides eerily accurate search results within seconds. It found my Macbook right away when I was revisiting the app at home…

Prices are not marked on any of store items. In what we can guess is an attempt to onboard new Amazon Prime customers, existing Amazon Prime members get Prime pricing (which fluctuates constantly, so it can’t be listed) as opposed to the higher “list price” for non-Prime people. I don’t know anyone who’s not a Prime member. Do you? I bet only a minority of customers here actually pay MSRP. Anyhoo, if you don’t have the app, there are plenty of “scanning stations” throughout the store that can be used to get all the item’s info.

Electronics demystified

A generous section of the store is dedicated to electronics devices, mainly those in the Amazon family: Echo, Kindle, Fire.

Innovative electronic gadgets are not always an easy sell. We often need to see them in action to convince us to take the leap and purchase. The electronics display seen here, paired with competent and enthusiastic sales associates, make the sale a lot easier: easily understood product descriptions, customer reviews, samples to play with and salespeople available to ask questions to. This is the model needed to break through that customer hesitancy barrier.

What’s new?

Discovery aisle at Amazon Books. This week, it’s about new kitchen gadgets.

This week, it’s about sous-vide cooking. This themed display features tools and books on this hot topic. It has everything you need to get started plus the reviews to guide you. Smart. Simple. Inviting. This makes me make a mental note to check out this display area to see what I might discover the next time I’m in the store.

Approachable atmosphere

The coffee shop offers teas, munchies, Stumptown coffee and great music. Everything you need to help you linger longer…

In contrast with how difficult it is to get any assistance in any of the big box stores today, the Amazon Books store has an enthusiastic sales team that is there for us, the customer. Every time I’ve been in the store (4 times now), everyone has been eager to help and knowledgeable. And cheery. I don’t think they’re putting on an act.

On three of those visits, I ended up in the coffee shop, reluctant to leave the store too quickly. As I was sipping my drink and digging into a new book, I found myself swaying to the soundtrack. Every time. I finally had to ask Brian, the coffee shop’s manager, an industry veteran who knows how create an inviting place. It was HIS playlist! Score. Here’s it is on Spotify. It’s an eclectic mix of favorites from different eras and genres – from Benny Goodman, ELO, The Rolling Stones, Lorde, James Brown and Pharrell Williams to name a few names of the 368 tracks. Keeper!

If you thought Amazon was a competitor to fear online…

While some critics like to refer to Amazon as an oligopoly that kills competition, it’s not the indie businesses that need to worry as much. In their case, it’s precisely because they have less resources and much more at stake that they knowingly work harder to deliver a superior experience that resonates with their customers.

However, the Amazon threat is indeed ominous for the big box and chain stores. It appears that these retailers never got the memo or just didn’t catch on to the fact that they now need provide their customers with in-store product choices and environments that spark a sense of discovery and delight.

Amazon does it again

Twenty years later, Amazon still rules with ecommerce innovation, UX and perspicacity into customer preferences. They’ve set the standard for the online shopper’s expectations. Now, they’re taking their game offline, handsomely transferring their skills to the physical realm. By my observations, as a consumer, they’re doing a darn good job at it too.

They made their debut in the physical space look easy and natural. And they made the in-store shopping experience fun and easy. Even the Apple Store experience seems lackluster in comparison.

It might be explained by Amazon having an “unfair” advantage over other retailers. It’s the “secret sauce” alluded to earlier: its data. Amazon knows more about us than we know about ourselves. And, with a sprinkle of AI, they can also predict exactly what we might want or need to buy.

As a consumer, I willingly traded my data for the convenience of personalized shopping. That’s just my data. At the next level, Amazon knows all about the community and the region’s needs, what works locally and seasonally and can serve it up at just the right time, at the right price.

Cedric

This brings to mind the A.I. conversation – the fear that general A.I. is inevitable and will destroy all need for human input. The reality is that humans need to work with machines to deliver a stronger experience. This to me is more a showcase of Amazon’s humanity – their understanding of the world’s shopping data and the best technology… And hand-picking elements out of it to deliver an experience that people want to have. And you can enjoy that experience without ever knowing what’s going on in the background.

Lawrence Johnson

You captured the genius of Amazon’s new retail experience. I did visit the store and it was a pleasant experience generated in part by design choices that embraced scale, balance and serendipity. I was not in a book store, but in a three-dimensional “My Preferences” section.

My only reservation about the experience was with the fact that Amazon, which by now knows a whole lot about me, never knew (or let me know that they knew) that I had actually walked into the store. Not that I want them to confirm that they are capturing vital information on my every step, but they could have invited me to introduce myself as I walked in (by tapping their app, for instance) and personalized the experience as I milled through the store. Based on all the data I provided to them in the past, they could have ushered me through the store.

At the end of the day, we know too well that they (successfully) re-invented the online merchandizing and e-commerce experience, but here, they missed the opportunity to extend online merchandising and browsing modalities to a real-time, 3-D, brick & mortar setting.

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Anne-Marie Kovacs

Hi, I’m Anne-Marie, seeker of the story-behind-the-story, promoter of indie anything, admirer of design, inquisitive observer of human behavior, merciless critic of unfortunate customer experiences and acute receptor of customer pain points. A marketing and business strategist by profession and consumer by human factor, I’m forever in search of the shopping, dining, entertaining or traveling experience that will truly delight me. Not as easy to find as one would think, now, is it?